It’s that time of year again, friends! Tax season. If you haven’t done them already, it’s time to make a plan so your taxes are done on time and correctly.
As small business owners, taxes can be so confusing – it’s not nearly as straightforward as a W-2 job. Managing all of your expenses, deductions, and write-offs is overwhelming to say the least (if you’re not a finance wiz, and most of us aren’t).
To make it easier, I’ve put together a list of tax deductions available to small business owners so you have the best chance of increasing your tax savings. Take notes and keep them handy! Having an organized list when you go to do your taxes (or work with your CPA) will make the whole process go more smoothly.
Now this is something that I’m pretty sure every single small business owner spends money on. Everyone needs to have some kind of website or marketing strategy, so take advantage of them when it comes to tax time. You can claim expenses related to:
These expenses are essential to building and maintaining your business, but don’t forget to write them off when you get the chance.
Ah, digital downloads. Another thing that I’m sure most small business owners are familiar with. If you’ve purchased a digital download this year to use somewhere in your business, you can write it off. Some examples of digital downloads include fonts or digital images.
If you’re using any kind of software for you business, this counts as a deduction. It doesn’t matter if you pay a monthly or annual fee either! Software can include programs like:
If you have a home office, you’re in luck! You’re allowed to claim expenses related to your work space. You may be able to count heating/cooling, electricity, and mortgage costs as deductions, but be careful – the amount you can claim depends on the size of your home office space.
You can also deduct the money you’ve spent on equipment and supplies. This includes things like computers, cameras, printers, an office desk, etc.
If you use your cell phone to help run your small business, you can claim it as a deduction. The cost of your phone and the monthly charges can be split up based on how much you use your phone while working on your business.
Pretty much everyone is using the Internet to run their small business at this point, so this is definitely an expense that you can claim on your taxes. You will need to base the expense on an estimate of how much you use the Internet for your business if you’re also using it for personal reasons.
If you’re paying fees for your business, it may be something that you can write off. Some examples include merchant processing fees and service fees.
If you’ve started your business with the help of a bank loan, the interest accrued might count as a tax deduction. Similarly, if you’ve used a credit card that accrued interest, you may also be able to write that off.
So many small business owners I know send client gifts to enhance their overall experience. It’s also a nice little thank you for supporting your business! And the good news is, you may be able to use the money you’ve spent on client gifts as a tax write-off.
If you’re running a small business and you’ve hired help, you may be able to use those payments as a tax deduction. Working with an independent contractor can make your life so much easier, and the total amount paid is an allowable write-off. Some types of contractors you may have worked with include:
If you’ve spent money to further your education related to your small business, you may be able to write it off on your taxes. And it’s not just courses either! Some education-related business expenses include:
You might be working with a lawyer or accountant on your small business, and if so, all of the fees that you’ve paid count as business expenses.
If you’ve traveled for your small business in the last year, you’re eligible to deduct your travel expenses on your taxes. Your expenses may include:
While this isn’t an exhaustive list, it’s a great starting point for tallying up all of those business expenses that you can use to increase your tax savings!
Also, make sure to get the help of a professional if you’re not confident in preparing your taxes and deductions on your own. It’s important to maximize your savings while also keeping everything above board.
Good luck this tax season!